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Trump Plays Up Bipartisan Outreach, Touts Magnitude of Tax Cuts

Posted on September 7, 2017 by Jonathan Curry

President Trump paired his prediction of “the greatest tax reduction in the history of our country” in a September 6 speech in Mandan, North Dakota, with a call for Democrats to join him for this “once-in-a-generation opportunity” or face the wrath of voters at the ballot box. 

Speaking at an oil refinery, Trump called attention to energy and environmental issues, highlighting his withdrawal from the Paris Climate Accord and approval of the Dakota Access pipeline. He repeated many of the themes from his August 30 speech in Springfield, Missouri, reciting the four principles for an “American model” of tax reform: a fairer, simpler tax code for individuals; tax cuts for middle-income taxpayers; a more competitive tax code that attracts business investments; and the repatriation of foreign-source corporate income.

Trump highlighted some of his specific tax reform priorities, including the repeal of the estate tax and “ideally” lowering the business tax rate to 15 percent, while reiterating that the lower business rate would apply to passthrough entities. He also hinted at new details to come, saying, “We’re going to get into great detail over the next two weeks, but we're working on it with Congress and coming up with very exacting numbers.”

This was the president’s second such speech in as many weeks to took place in a state with a sitting Democratic senator. Trump administration officials for weeks have said openly that they planned to use Trump’s traveling speeches to put pressure on what they perceive to be vulnerable Democratic senators, with White House officials noting in a September 5 conference call with reporters that Trump won North Dakota in the 2016 presidential election by a 36 percentage point margin. 

White House deputy press secretary Lindsay Walters played up the potential for cooperation across the aisle on tax reform in a September 6 press briefing ahead of the speech, noting that the bipartisan Tax Reform Act of 1986 had the support of a Democratic senator from North Dakota, and that Sen. Heidi Heitkamp, D-N.D., would be traveling that day with Trump on Air Force One. Walters emphasized the importance of bipartisanship, saying, “Only through such cooperation will productive work begin this fall to ensure this critical legislation makes its way through Congress and ends up on the president's desk.” 

At the start of his speech, Trump called on several lawmakers to join him on stage, Heitkamp among them, and then gestured toward the group, saying, “You are all in favor of tax cuts.” Then, singling out Heitkamp, Trump remarked, “Everyone’s saying, ‘What’s she doing up here?’ But I tell you what, good woman, and I think we’ll have your support, and I hope we’ll have your support.” Later in the speech, Trump said that “if Democrats don’t want to bring back your jobs, cut your taxes, raise your pay, and help America win, voters should deliver a clear message: do your job to deliver for America or find a new job.” 

Jeffrey H. Birnbaum of BGR Group said that Trump’s approach, wielding both carrots and sticks, presents the best hope for passing tax reform. “Lots of arguments will have to be brought to bear to persuade a majority in Congress to vote for anything as difficult as tax reform. It’s hard to see how reform can pass with just Republican votes,” Birnbaum told Tax Analysts. 

Trump’s remarks about Heitkamp echo comments he made about Senate Finance Committee member Claire McCaskill, D-Mo., in his Missouri speech. But even though Trump has singled out individual Democrats to be a part of the tax reform effort, some Democratic leaders say they’re still waiting to hear from their Republican counterparts in Congress.

Senate Finance Committee ranking minority member Ron Wyden, D-Ore., said, “There has been nothing in the way of outreach to this side of the aisle.” Senate Majority Leader Mitch McConnell, R-Ky., “has made clear that he plans a go-it-alone, partisan process,” Wyden said, adding that that’s a “bad sign for anybody who wants tax reform to protect progressivity and put dollars back in middle-class families’ pockets.” 

Frank Clemente of Americans for Tax Fairness said that Democratic lawmakers should outright reject the notion of cooperating with the Republican majority on tax reform. Speaking to reporters on a September 6 conference call, Clemente said that voter surveys have shown that the idea of cutting corporate taxes is unpopular, and that the public is “overwhelmingly on our side when it comes to this agenda.” 

On the same call, Seth Hanlon of the Center for American Progress acknowledged that some Democratic lawmakers “certainly are interested in working on tax reform and have an obligation to find common ground.” But he added that for Democratic lawmakers to be able to cooperate on tax reform, there has to be agreement on the basic principles of tax reform, namely, that tax reform shouldn’t threaten Social Security or Medicaid and Medicare by losing revenue, and that it should be “focused on working people and not those at the top.” 

From what is known about what Trump wants in a tax plan so far, those two principles aren’t being met, according to Hanlon. He said that while Trump claims his plan will benefit middle-income taxpayers, 51 percent of the proposed tax cuts under Trump’s plan would go to the top 1 percent of earners in North Dakota, and the bottom 60 percent of earners would receive only 7 percent of the tax cut. Hanlon said that around half of all families with children and with incomes under $100,000 would actually see their taxes increase, “and that’s before Trump even begins filling in the details of how he’s going to pay for things, like a $2 trillion tax cut for corporations and a $2 trillion Trump loophole.” 

As for Heitkamp, her office released a statement September 1 saying that she was “glad to welcome President Trump to North Dakota where North Dakotans are eager to hear more about his tax reform plan.” Her office did not respond to Tax Analysts’ request for comment by press time.

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